2787 Park Boulevard
A 76 Unit Affordable Palo Alto TOD in a Job-Rich Area
Figure 1: Four three-story apartment buildings on a blue ‘L’ shaped lot with play
structures and a red, partially underground parking podium. Perspective view from
Park Boulevard, looking Northeast towards the Caltrain railroad tracks.
Steve Raney
Cities21.org
June 21 Update to May 23, 2002 Version
2787 Park Blvd
Page 1 of 17
Figure 2 – Perspective view from Page Mill Road, looking Northwest.
May 22, 2002
Marlene Prendergast
Executive Director
Palo Alto Housing Corporation (PAHC)
725 Alma Street
Palo Alto, CA 94301
Dear Marlene,
This report follows our May 9th conversation regarding the 2787 Park Boulevard site.
Recommended is a 76 DU “four percent tax credit” community on the 1.25 acre parcel; 61
units at 60% AMI, 15 at 100% AMI. Though laudatory, the public policy objectives of the
nine percent tax credit would create a project ill-suited for this area. Rather than very lowincome residents, the target market is moderately paid Stanford Research Park workers and
Palo Alto employees. 40 units are reserved for Stanford Research Park (SRP) workers, 20
for Palo Alto School District teachers. For perspective, a Palo Alto teacher making
$37,000/year barely qualifies at the 60% AMI ($40,000) one-person level. Alternatively, two
such teachers could share a 100% AMI ($76,000) apartment.
Four 80’ x 70’ x three-story buildings accommodate two 450 square foot studios, thirty 600
square foot one bedroom units, forty 800 square foot two bedroom units, four 960 square foot
three bedroom units, laundry, and two community rooms. The laundry, community kitchen,
and community classroom are all studio size.
2787 Park Blvd
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An innovative parking proposal accommodates 60.5 DU/acre density and improves financials;
90 platform parking spaces under two of the buildings and the rest provided via either parallel
on-street parking or shared parking with the adjacent Caltrain commuter lot.
Financing is largely derived from two sources, Palo Alto’s Housing fund and four percent tax
credit financing. Adding 15 100% AMI units better serves the target market and has the
additional benefit of improving cash flow which reduces Palo Alto’s contribution by $500,000
while still maximizing tax credits.
However, four percent financing isn’t easy. The other critical contributions are $2M from SRP
employers and $1M from the School District as consideration for 55 year reservations on 40
and 20 units respectively. By increasing employee retention, this investment has a positive
NPV for employers. For the School District, this investment is five times more productive
than the current proposal to build apartments on school district land.
Given Palo Alto’s promotion of two new affordable projects, the SRO Opportunity Center and
an Eden Housing project, the next big affordable project probably won’t commence until
2006. Then, Palo Alto’s increased commercial development impact fees will have generated
enough to finance a major parcel acquisition.
2787 Park Boulevard is already on Palo Alto’s short list for site control, with the City Manager
taking a personal interest. The site has already been cleared. My own efforts to contact the
parcel owner of record, Los Angeles based Madrona Design and Manufacturing, were
unsuccessful. Cathy Siegel, PA Housing Programs Director, claims that this site has a
reluctant seller, but I believe she is referring to the adjacent 195 Page Mill Road parcel, which
is also targeted for housing in Palo Alto’s Housing Element. This parcel, a family property
actively engaged in general manufacturing, was recently committed to a long-term lease. [PA
Daily News, 4/5/01].
Table of Contents:
1. Location, Site, and Building Description
2. Financials
3. PAHC advantages
4. Location Advantages
5. Poor fit of TCAC nine percent credit
6. Environmental
7. Parking
8. Market analysis
Attachment: nine page proforma spreadsheet
1. Location, Site, and Building Description
Zoning
The site is currently zoned GM4 for general manufacturing, requiring a zone change to
Planned Community to enable 60 DU/acre, the density allowed in PAHC’s Oak Court site.
Planned Communities require a finding of a compelling community need, such as providing
affordable housing. In parallel with the re-zone, the General Plan Land Use map will have to
be amended. Palo Alto will commit funds via a Development Agreement. 2787 falls under a
2787 Park Blvd
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40-foot building height zone, limiting the project to three stories. The allowable setback is 25
feet, but reductions to 10 feet are regularly granted via variance.
Parcel details
2787 is an ‘L’ shaped parcel, measuring about 273’ along the long portion of the ‘L’ and 262’
along the short edge of the ‘L’. The entire site covers 1.25 acres.
Neighborhood
2787 is surrounded by non-residential uses (see Figure 3): railroad tracks, the four-lane Alma
Street arterial, office buildings, a general manufacturing facility, and the four-lane Page Mill
Expressway underpass. The underpass passes directly under Park Boulevard with no impact
on street-level function. The unnamed street between 2787 and the railroad tracks has been
mentioned by Palo Alto as a potential give-away to incent an affordable project. 2787 has
been cleared except for a small pile of broken cement. 2747 Park Boulevard houses some
small one-story offices, separated from 2787 by a fence. Only a portion of Agilent’s huge
parcel is shown. There is a small, detached single-family residential street Southeast of
Agilent. Northwest of 2787, and outside of the frame of Figure 3, lies multifamily housing,
leading the way to the convenient California Avenue retail area.
N
Apartments
Alma St. - Arterial
Caltrain RR Tracks
Caltrain Parking
2787 Park Blvd.
Page
Mill
Expwy
Under
pass
Page Mill Rd.
Offices
2747
Park
195 Page Mill – Genl
Manufacturing
Park Blvd.
200 Pg Mill
Offices
Santa Clara County Parking
355 Page Mill – Agilent
Technologies
Offices
Figure 3: 2787 Park Boulevard neighborhood.
2787 Park Blvd
Page 4 of 17
Site plan
Figure 4: Site Plan
Four 80’ x 70’ three-story apartment buildings are placed on the parcel. The 190’ x 142’
parking podium is shown in red and three play structures in gray. These structures
demonstrate productive use of the open space – a final design by a landscape architect will
eliminate two structures and add plantings.
Lot coverage is 41% and FAR is 1.23. Compared to surface parking, the major benefit of the
parking platform is an increase in usuable open space to 64% of lot area. 2,800 square feet
of open space comes in the form of balconies. An appropriate example of large platform
design can be found in Promethius’s Park Place apartments in Mountain View.
Architectural features
The renderings, such as they are, represent an attempt to move away from “dorm style” to
“elementary New Urbanist.” Apartments are allocated to four “small” buildings with a
maximum dimension of 80’. To further reduce the impact of size, the third story is smaller
than the first two. A sloped roof further differentiates the buildings from dorms. Cornices,
balconies, and deeply sunken windows add interest to facades.
Floor Plan:
Each floor measures 70’ x 80’. A 10’ wide hallway separates two 30’ x 80’ areas. These
areas are configured four different ways: A) four one bedroom apartments, B) three two
bedroom apartments:
2787 Park Blvd
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30’
10’
30’
20’
27’
600 s.f. - one bedroom
800 s.f. - two bedroom
20’
27’
20’
27’
20’
Figure 4: Four one bedroom + three two bedroom floor plan
C) four studios and a one bedroom apartment, and D) a one bedroom, a two bedroom, and a
three bedroom apartment:
30’
10’
30’
450 s.f. - studio
20’
15’
600 s.f. - one bedroom
15’
800 s.f. - two bedroom
15’
27’
15’
960 s.f. - three bedroom
600 s.f. - one bedroom
32’
20’
Figure 5: Four studios and one bedroom + 1B, 2B, 3B combo
To create the chosen mix of bedroom sizes, there are six #A, twelve #B, two #C, and four #D.
Three studios are used for laundry, community kitchen, and community classroom. Common
2787 Park Blvd
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area for the three community rooms + hallways comes out to 14.5% of total building square
footage.
The 600 square foot one-bedroom apartments are a bit larger than Oak Court’s 560 square
foot flats, and the 960 square foot three-bedroom apartments are smaller than Oak Court’s
1100 square foot units. Unburdened by TCAC nine percent large family dictates, more
appropriate sizing of three bedroom units is provided.
All apartments have square footage as advertised, except on the second floor, where each
apartment has an additional 50 square foot balcony (unaccounted for in current financials).
The balconies are a crucial factor in providing market and political appeal. Third floor square
footage includes large balcony areas.
Figure 6. Elevation from Page Mill Road looking NW towards the
Caltrain station. Parking platform shown in red.
2787 is particularly well suited for five-story wood frame construction, as seen in downtown
San Jose. Cost per square foot isn’t much more (sprinkler system, fire resistant framing, fire
detection system) and The Council favors increased density. If Housing Programs Director
Siegel is willing to champion the cause, an additional 50 DUs with a larger parking platform
should be pursued. The later section entitled “2787 Location Advantages” explains
political/NIMBY considerations related to increasing height. For five stories, each existing
pair of two buildings would be connected at a corner, allowing elevator sharing, while
avoiding a “dorm-like” appearance.
Financials
Project cost and funding is summarized in Table 1 below. The complete nine page proforma
is provided as a separate, attached document:
2787 Park Blvd
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AZ
BA
BB
BC
BD
BE
Sources:
$130,000 Predev. Costs
$1,339,969
PA Housing Fund
$6,730,730 Land
$5,545,100
Permanent Loan
$3,477,764 Predevelopment Soft
$1,484,712
$400,000
CDBG + AHP + school dist
$2,070,000 Const. Soft (incl contingency)
$282,048
Sobrato+SCC Hsng+SRP cos
$2,930,000 Construction Costs
$11,199,910
$514,048 Lease Period Costs
$269,198
City Waivers
33
34
35 Developer Cash
36
37
38 Sources:
Limited Partner Equity
46
47
48
49
50
51
52
53
54
55
56
57
58
Deferred Development Fee
$527,922
Developer Cash
$1,339,969
TOTAL
$1,339,969
$3,822,483 Finance Costs
$228,254
$100,000 Developer Fee
$1,200,000
$20,172,946
$10,079,919 Constuction Costs
$17,436,978
$6,455,060
$88,562 Land
$72,962
Permanent Loan
$45,760 Predevelopment Soft
$19,536
CDBG + AHP + school dist
$27,237 Const. Soft (incl contingency)
Sobrato+SCC Hsng+SRP cos
$38,553 Construction Costs
$147,367
$6,764 Lease Period Costs
$3,542
$232,000
CDBG Funds
$400,000
Limited Partner Equity
AHP Funds
$270,000
Deferred Development Fee
City Waivers
$0
TOTAL
$20,172,946
PA Housing Fund
reduced parking reqts
Developer Cash
Total Uses
Per Unit Sources and Uses
Uses:
PA Hsng Fund - soft loan
$245,772
$527,922
Total Sources
CONSTRUCTION
Construction Loan
BH
Uses:
32
TOTAL
BG
Total Project Cost
Uses:
28 Sobrato Housing Fund
29
30 CDBG Funds
31 City Waivers
39
40
41
42
43
44
45
BF
PREDEVELOPMENT
26
27 Sources:
$50,296 Finance Costs
$3,003
$1,316 Developer Fee
$15,789
Developer Cash
$17,436,978
TOTAL
$17,436,978
$3,234
$6,946
Total Sources per Unit
$265,434 Total Uses per Unit
$265,434
PROJECT TAX CREDIT BASIS
TAKE-OUT/Permanent
Sources
Unit Type
Uses
Permanent Loan
$3,477,764 Take Out Costs
Limited Partner Equity
$3,822,483 Retire Const. Loan
Limits
Units
Aggregate Basis
Studios
$83,676
2
$167,352
$1,395,999
1 br
$96,477
30
$2,894,310
$10,079,919
2 br
$116,353
39
$4,537,767
PA Housing Fund
$275,670
3 br
$148,932
4
$595,728
Deferred Developer Fee
$100,000
4 br
$165,916
0
$0
Housing Trust of SCC
$800,000
Manager's Unit
$116,353
1
$116,353
76
$8,195,157
SRP companies
$2,000,000
TOTAL RESIDENTIAL BASIS
PA School District
$1,000,000
Project Adjustment (based on project attributes)
Developer Cash
59
60
61
$0
25.00%
DDA 130% * 10327.C.5 140%
182%
Maximum Credit Basis
Total
$11,475,917
Total
$11,475,917
$18,643,982
Percent of Project in Tax Credit Units
76.6%
Maximum Credit Basis
$14,284,410
Table 1: Project Financial Summary
Costs
2787 cost per DU is much less than PAHC’s Oak Court project, $265,000 versus $400,000.
To meet the TCAC large family requirement, Oak Court is burdened with fewer (53 DU) and
larger units (26 out of 53 are 1100 square foot three bedroom. In addition, “neighborhood
blending” architecture, $500,000 demolition, and historic preservation further increase Oak
Court costs.
Land cost for the 1.25 acre 2787 parcel is $5.5M ($110 per square foot), nearly equivalent to
the $5.8M valuation of the 1.23 acre Oak Court parcel. Residential construction cost is an
optimistic $100 per square foot, partially justified by a recent rumor of $75 per square foot
multifamily construction in Menlo Park [MSH]. Energy efficient construction is included in the
$100 figure. Solar panel costs are not included, but PAHC’s communication with Palo Alto
Utilities suggest solar can be added with minimal financial impact, especially since Palo Alto
Hardware (solar expert) will no doubt install the system.
Financing Sources
2787 Park Blvd
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Nine percent tax credits would greatly ease financing. Assuming the usual mix of AMI rent
levels for a high QAP score, the nine percent credit generates $9.1M. In a nine percent
scenario, Palo Alto could fund less than 100% of site acquisition. With the noncompetitive
four percent tax credit, only $3.82M credit is available, assuming residential basis is adjusted
upwards by:
 25% for a combination of underground parking, TOD, energy efficiency and solar
(CTCAC code section 10327.C.5)
 40% because Palo Alto is a federally designated “difficult to develop” area. (CTCAC
code section 10327.C.5)
 30% because Palo Alto is a high cost area (CTCAC code section 10327.D.1)
2787 funding sources borrow extensively from PAHC’s Oak Court funding model:
Source
Amount
Comment
PA Housing Fund
$8,452,000
Permanent Loan
$2,700,000
AHP
$270,000
SCC Hsng Trust
$400,000
Sobrato Housing Fund
$130,000
Shared Auto Ramp Funding
$600,000 PA, PAHC, and adjacent development share costs
PAHC cash
$625,000
PA Waivers
Deferred Developer Fee
$200,000
Limited Partner Equity
$7,967,500
total $21,344,500
Table 2: Oak Court Funding Summary. [City Mgr Report]
For 2787, the same amounts are taken for Sobrato and AHP. SVMG’s SCC Housing Trust
contribution is doubled to $800,000, because 2787 is tailored to match SVMG objectives (see
later paragraphs in this section). Basis is maximized by adding in $500,000 in Palo Alto fees
and then waiving them on the other side of the ledger. This is quite aggressive in that most
of these “waivers” are really statutory exemptions. Compared to Oak Court, $800,000 in
CDBG funding is added and PA Housing Fund contribution is reduced. The school district
and Stanford Research Park employers fill the remaining $3M gap.
Driven partially by an objective to minimize Palo Alto’s contribution and maximize four
percent tax credits, 21 different combinations of market rate apartments were calculated.
Adding 100% AMI market rate units is also desirable from a policy standpoint because 100%
AMI just barely accommodates two entry level teachers. Moving from no market rate
apartments to fifteen two-bedroom units reduces Palo Alto’s contribution by $510,000!
In Palo Alto, affordable developers can safely assume the City will fund site acquisition. Oak
Court, the Opportunity Center, and Eden’s new project all have this commitment. For Oak
Court, Palo Alto contributed an additional $2.6M above land costs.
On March 25, The Council approved changes to the housing impact fee charged on new
commercial development from $4.21 per square foot to $15.00 per square foot. [Impact Fees]
Annual revenue is expected to grow from $400,000 per year to $1.5 million per year,
increasing The City’s ability to acquire sites.
Parking plays a big role in financials, and will be covered in the Parking Section.
2787 Park Blvd
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Financing: Housing Preference
PAHC’s Oak Court has a housing preference scheme for Palo Alto workers. Stanford’s
Stanford West development has a more complex scheme with three priority levels: Stanford
worker, Palo Alto worker, Menlo Park worker. There are fifteen other Bay Area cities with
various preference schemes, favoring workers, teachers, and/or city employees. [Preference
Housing]. For 2787, a complex preference scheme will be implemented, with third parties
paying $50,000 for preference for one DU for their constituents for 55 years. This type of
scheme is both legal and, because the housing is affordable, will easily comply with the Fair
Housing Act, unlike some Bay Area preference schemes.
Financing: Housing Preference: Teacher Housing
Teacher retention is a very large issue in both Palo Alto and Silicon Valley as a whole. On
January 12, 2001, the Palo Alto Daily News reported on efforts to provide better housing
options for teachers: “The local citizens group Housing Options for Teachers (HOT) surveyed
teachers. 43% said they will not stay within the school district for more than five years.
Turnover has plagued many local school districts and many teachers have reported fleeing
high housing costs.” [District talks Teacher Housing] The article went on to mention that the
school board was studying seven ways to increase housing opportunities, including building
rental housing on school land. The Council of PTAs also played a role in the effort.
Rather than building rental housing on school land for something like $200,000 per unit in
construction and other non-land costs, the school board could invest in 2787 priority
preference for teachers, providing four or five times more DUs for the same amount of
money.
The school district should be encouraged to either float a bond for these preferences or use
their many connections (SVMG, government sources, etc.) to raise $1M for 2787.
SVMG is a big backer of teacher housing. On Jan 1, 2001, San Jose Mercury News
interviewed Stanford Research Park-based Roche Bioscience’s President James Woody,
who also serves as SVMG Chairman. Regarding teacher housing problems, Woody said,
“They have the same problem as everybody else, except that their salaries are fixed at a very
low level, so we’ve got to continue to do something to help them out.” SVMG partnered with
Santa Clara’s school district on 40 affordable apartments for teachers. SVMG’s web
[http://www.svmg.org/Committees/Education/] states, “SVMG will also help to promote this
concept with other school districts.” Intel’s Teacher Housing Fund contributed $1.3M to this
project, proving large employers are willing fund such projects. For 2787, PAHC should also
consider making proposals to the Hewlett and Packard Foundations.
Financing: Housing Preference: Workforce Housing
Before the law requiring direct and proportionate impact fees, Stanford Research Park
employer Varian underwrote PAHC’s 1989 California Park project, as mitigation for
increasing FAR on their SRP parcel. Varian set the precedent of involvement in housing;
Intel’s contribution above adds to it. SVMG echoes the sentiment that housing is important.
In Woody’s interview, he listed the main SVMG priority as “recruiting and retaining
extraordinarily talented and innovative people. We want a really good quality of life. We
want a really engaging, enterprising atmosphere here in the region.” He then expressed a
strong interest in transportation, housing, and education problems that reduce quality of life.
2787 Park Blvd
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“Transportation is a problem. Because of the cost of housing, my employees have to live
farther out and commute in, and it’s getting tougher.”
The offer of a dedicated employee apartment for 55 years is financially justified, even for
lower salaried workers. A home in Palo Alto entitles a family to send their kids to the state’s
best school district. So an affordable rental unit in Palo Alto becomes a handcuff keeping
workers at a company. From a quality of life standpoint, an apartment right by Stanford
Research Park can eliminate up to three hours of commute per day, providing much more
family quality time. Average SCC commute is 14 miles one way, but much worse for lower
income workers. Technology titans can afford $2M homes in Palo Alto, but those lower on
the totem pole have to drive much farther to find affordable housing.
From an employer’s standpoint, reduced employee turnover hits the bottom line. Replacing a
worker results in costs for recruiters, employment ads, time spent interviewing applicants, lost
productivity while the position remains vacant, and new worker training. Assuming position
turnover drops from 20% per year to 10% per year and the cost of replacing a $40,000 per
year worker is $10,000, this results in a $10,000 savings every 5 years for 55 years, a
$110,000 savings from a $50,000 investment.
Assuming a 2006 groundbreaking, PAHC should present the apartment reservation concept
to SVMG and the School District as soon as possible.
Funding Alternatives
The major funding risk is the $3M raised from housing preference. Alternatives to fill this gap
include:
 MTC’s Transportation for Livable Communities Neighborhood Capital Program
provides between $150K and $2M per grant for transit villages. 2787 should score
very high because of shared parking with a transit station, de-generation of “errand
running via car” due to the three block distance to California Avenue retail, and
workforce housing preference program. MTC’s TLC program also has a Housing
Incentive Program (HIP) providing up to $2,500 per affordable unit when built at
60DU/acre. This could provide $190,000 to 2787. HIP funding is at risk, but is
expected to be solidly funded in 2006.
 For PAHC’s Oak Court project, Palo Alto contributed an additional $2.6M beyond land
acquisition costs, so may be willing to provide more funding.
 Convert 10 out of the 76 DUs to 1,000 square foot market rate for-sale condos,
generating $3M in profit ($250 per square foot profit taken from a Mayfield site market
rate proposal).
 The School District is pursuing $20M in state grant money for a “joint homework”
program at a library, called “Everyone’s Homework and Enrichment Center” [PA Daily
News, 5/20/02]. Some of this money could be applied to the 2787 classroom.
PAHC advantages
PAHC provides many advantages for addressing this site. First, 2787 lies right next to
Caltrain railroad tracks, like PAHC’s Calfornia Park project, 4 blocks Northwest. For that
project, PAHC mitigated train noise, bringing in noise engineers to design sound walls and
appropriately insulate walls and windows. Second, PAHC has a dedicated Family Activity
Counselor leveraged over all 600 of PAHC’s apartments. The Coordinator knows Palo Alto’s
2787 Park Blvd
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activities and educational programs and can really make a difference in tenant personal
development. In addition, 2787’s proximity to California Park provides synergy between the
Coordinator’s ridesharing coordination. Third, PAHC’s Calfornia Park project pioneered
reduced parking via a parking / landscaping area set aside. Fourth, PAHC pioneered SRP
company funding of affordable housing. Fifth, PAHC has a track record with SVMG’s SCC
Housing Trust.
2787 Location Advantages






Retail: within walking distance of two grocery stores, child-care, fifteen restaurants
and cafes, a book store, movie theatres, a gym, a computer superstore, and auto
repair. Please see Figure 7 below for a larger retail context.
Parks: walking distance to two neighborhood parks and 1/3 mile from the area’s most
popular hiking spot, The Dish, with its breathtaking views.
Traffic / transit: direct access to arterial streets – no impact on residential streets.
Three blocks to Caltrain commuter railroad station. New “baby bullet” program
reduces SF to SJ trip to 55 minutes, faster than rush hour auto trip. Caltrain connects
to VTA Light Rail in Mountain View providing further access to Silicon Valley jobs.
Four blocks to VTA bus transit hub. New signalization and queue jumping programs
provide improved bus service along El Camino Real. Recently augmented SRP
shuttle service from the Caltrain station provides car-free job access.
Classes: Palo Alto features a wealth of classes offered by Foothill Junior College,
Stanford, Palo Alto Adult Education, and Palo Alto Enjoy kids programs. PAHC’s
Family Activity Coordinator is the key link to avail tenants of these classes. Palo Alto
School District is the state’s best.
Jobs: Stanford Research Park and Stanford campus (including the shopping center
and hospital) provide more than 40,000 jobs. 2787 is blessed by exceptional access
to these jobs. Please see Figure 7 below for a larger employment context.
NIMBYs/politics: while no Palo Alto project is ever immune from community
meddling, 2787 has all the trappings of a fast track project: A) City Manager interest,
B) no detached single family homes within 2 blocks (unlike Oak Court), C) prevalence
and acceptance of multifamily housing in the neighborhood (unlike Oak Court), D)
prevalence of three story structures in the neighborhood coupled with Alma Street
arterial to the Northeast, resulting in minimal impact on the viewshed looking towards
the Coast Mountains to the West, E) teacher housing component will compel parents
and school board to support the project at public meetings.
2787 Park Blvd
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Figure 7: Neighborhood Context
Poor fit of TCAC nine percent credit
Table 3 below depicts a hypothetical “winning” QAP score of 154 if nine percent credits were
to be pursued. PAHC’s Oak Court project scored 151 this year, but still lost out to two
projects scoring 153 (SRO and special needs) in the highly contested Santa Clara County
competition. Adjacent to the hypothetical nine percent column is a column entitled “4%
score”, the score the project would receive as currently proposed, which sums to only 68:
2787 Park Blvd
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9% score
4% score
20
20
Using less than available credit basis and/or sufficient public financing
General Partner
6
6
Rules are getting tighter for smaller developers like PAHC
Mgmt Company
3
3
10
0
Effectiveness
Comments
Experience
Negatives
Project Type
Large family - 10
Special needs - 12
30% 3 bdrm. Poor fit for this location.
25% HIV, abused, mental illness, homeless, etc.
At risk - 10
SRO - 12
90% SRO (no bathroom). Opp. Center sereves this market.
Senior - 10
100% > 55 yrs old
Site Amenities
TOD
5
5
800' to Caltrain, 1000' to bus transit hub
Park access
5
5
Two convenient parks within 5 blocks
Grocery access
5
5
3 blocks to Mollie Stones Market
Schools
5
5
1/2 mile to 2 elementary, 2/3 mi to 2 high, 1 mi to middle.
5
5
Live in teachers provide this.
5
5
Within 1/4 mile - PAHC family coordinator facilitates.
Revitalization Plan
0
0
No CA Ave master plan. But PA has teacher hsng plan.
Govt, non profit
0
0
No $ for CA Ave, but $ committed to teacher hsng.
3rd party evidence
0
0
Grass roots efforts
0
0
CA Ave assoc. - inactive. H.O.T. + PTA - active.
Housing Element, etc.
3
3
Proof that Palo Alto is adding affordable housing in high income areas
20% @ 30% AMI
3
0
Poor choice for this location
Houses w/i 1/2 mi
2
2
Proof of expensive houses w/i 1/2 mile
Green construction
7
7
Lowest Income
50
0
Very low income is a poor fit for this location.
Readiness
20
20
The Council is very helpful in attaining this.
154
71
Need 153 to win
Service Amenities
After school pgm
ESL, PC classes
Child care
Neighborhood Revitalization
A very creative teacher housing "spin" might justify this.
Balanced communities
total
Table 3: TCAC QAP Score
The main obstacles to a winning nine percent score of 153 were:
 TCAC’s experience criteria favor large developers of affordable housing such as
Eden. The rules are tightening so that it may be hard for PAHC to obtain the
maximum score in years ahead.
 Project type is very problematic. The 2787 neighborhood is located far away
(compared to other affordable sites like the Opportunity Center) from typical affordable
support services for special needs, SRO, and senior projects. The only real possibility
is large family, but this is poor fit for the natural market for the area which is entry level
teachers and moderate income research park workers. In addition, square footage
requirements for three bedroom units are much larger than necessary, further eroding
project economics. While feeling there will always be demand for any type of
affordable housing in Palo Alto, PAHC feels two bedroom apartments represent a
much sweeter spot in the market than three bedroom.
 Neighborhood Revitalization is mutually exclusive with the Balanced Communities
points, and offers the potential for a higher point total. For neighborhood revitalization,
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
there is no area plan and no investment in the California Avenue area. It might be
possible to very creatively “spin” Palo Alto’s overall teacher housing initiatives into
some points here, citing active participation and investment by the city, school district,
the Council of PTAs, and the Housing Opportunities for Teachers nonprofit. For
Balanced Communities points, 3 points for “20% of units at 30% AMI” is crucial to
hitting 151, but this very low income mix is a very poor choice for this neighborhood
and a much better choice for senior housing.
The 50 point Lowest Income section also forces very low income housing on this
neighborhood.
Of note, an affordable teacher housing project provides a ready supply of resident teachers to
support after school programs, ESL, and PC classes listed under service amenities.
Environmental
The site does not appear to pose significant environmental problems.
Noise
As previously mentioned, PAHC already addressed similar noise challenges with California
Park. Caltrain will be electrifying rail service, which reduces train noise, decreasing the
required mitigation.
Hazmat
At first glance, the 2787 site, which served as home of a Pacific Ready Mix cement plant from
1966 to 1987, would seem a logical candidate for environmental cleanup. However, cement
making is a relatively benign activity, using sand and gravel, possibly leaving some lye.
[MSH] Most of the groundwater in the area is polluted from printed circuit board
manufacturing in Stanford Research Park. But this groundwater, at a depth of 18 feet, will
not impact construction.
Palo Alto’s “BODS” system, the electronic scanned document image vault of all City
documents, provides insight into the neighborhood. Please see Figure 3 to relate addresses
to 2787:
 2747 Park Blvd – (adjacent site) has an underground 550 gallon steel gasoline tank.
 2787 Park Blvd – (our site). June 2001 – complaint about accumulated trash,
complaint about a homeless person: Jan ’97. Pacific Ready Mix owned it from about
’66 to ’87.
 195 Page Mill Road – no reports even though it is an active general manufacturing
site.
 200 and 216 Page Mill Road – (across the street). Used to be a gas station from ’60’73. Had underground tanks including propane. ’84 EIR for parking garage had a
negative declaration for hazmats. ’84 soil analysis revealed gas odor in bores down to
18 feet. Groundwater starts at between 18 to 22 feet below surface. Soil is rated very
stable for construction.
 355 Page Mill Road – Agilent technologies. In ’95, in order to clean up the soil,
installed a soil vapor extraction system. Site was contaminated with VOCs, primarily
trichloroethylene and perchloroethylene. Soil noted as generally dense with little risk
of liquefaction during major earthquakes.
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Parking
151 parking spaces are required by Palo Alto code for the mix of 76 DUs. These are
comprised of: 90 platform spaces, 20 on-street parallel spaces (3 handicap), and 41 “offhours” Caltrain commuter spaces. Additionally, eight 20-minute on-street drop-off spaces are
provided.
The platform measures 190’ x 142’, covering 27,000 square feet and providing 90 spaces at
a comfortable 300 square feet per parking space (I’ve drawn a similar platform design on
another project, providing 10 foot wide spaces to prevent dents). Within the platform there is
sufficient space for piers, stairs, and bicycle storage. Cost per space is $14,000. The
practice of “unbundling” monthly parking space rent from apartment rent will be used to
reduce demand for parking [PARKING]. $40/month is an appropriate starting rent.
Unbundled parking will increase complexity of TCAC annual reporting, but is still worthwhile.
On-street parallel parking will be provided along the Northwest side of Page Mill Road and on
the unnamed street between 2787 and the railroad tracks. The unnamed street will change
to run one-way to accommodate parking on both sides. This street has been mentioned as a
possible bonus parcel that Palo Alto would provide as an incentive to an affordable
developer. Because it lies directly adjacent to the noisy railroad tracks, the parcel is ill-suited
for housing, but serves nicely for on-street parking and as a parking/landscape reserve to be
develop completely into parking if needed. PAHC pioneered the parking/landscape reserve
at California Park where, once occupied, a parking study conducted by Ryan Russo
(graduate of UCB Department of City Planning now working for Nelson Nygaard Consulting)
proved that Palo Alto’s parking requirements were too high. The City agreed that it was
unnecessary to convert the reserve to parking and the empty field was converted into a lovely
children’s play area.
2787 is surrounded by acres of parking that lies fallow on weekends and on weekdays from
6PM to 8AM. Caltrain, Santa Clara County’s two-story structure, 200 Page Mill Road, and
Agilent all share this utilization pattern, providing an opportunity to share the wasted space
with 2787 residents during non-work hours. The Caltrain lot currently has a 24 hour parking
limit. Special 6PM to 8AM parking permits would need to be issued for 2787 residents.
Coincidentally, Palo Alto is in the process of implementing downtown permit parking.
Transportation Director Kott has requested the most progressive parking policies in the
nation, and will be willing to champion shared parking.
Market analysis
ABAG’s Housing Element request for Palo Alto is 1,397 DU by 2006, with income breakdown
as follows:
# DUs
AMI Level
265
< 50%
116
50% - 80%
343
80% - 120%
673
> 120%
[PA Weekly, Jan 30 20 02]
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ATTACHMENT: 9 page proforma
Please excuse the complexity of the spreadsheet, it comprehends 9 percent, 4 percent, and
market rate housing projects, as well as mixed use projects – overkill for 2787.
REFERENCES
[City Mgr Report]: 2/4/02. “Council approval of DA for Oak Court.” Pg 11 lists PAHC’s
financing sources.
[District talks Teacher Housing] January 12, 2001, Palo Alto Daily News.
[ Impact Fees] Development Impact Fees – Rate Changes. Current Planning document:
4/05/02.
[MSH] UCB Professor Michael Smith-Heimer. Large portfolio of affordable work includes
consulting PAHC’s California Park affordable project.
[PAHC] Marlene Predergast, Palo Alto Housing Corporation. 6/11/02 response to this paper:
“Sorry to be slow. I seem never to get to the fun stuff, like reading your report. It is good.
<Made 4 suggestions which have been incorporated.> Eden is now looking for a site and
should have the benefit of your thinking. It was a pleasure to talk to you about this. You can
have my job when you want it!” <Last sentence shouldn’t be taken literally.>
[Palo Alto] Amy French, Planning. Ann Shannon, Bldg Technician. Steven Turner,
Planning. Cathy Siegal, Director, Housing Programs. Jose Jimenez, Utilities Tech: Gas &
Electric.
[PARKING] http://www.cities21.org/ITSWC_SmartParking_071505.doc, Paid, Automated,
Single-Operator Parking for Stanford Research Park. Paper for ITS (Intelligent
Transportation Systems) World Congress, November 8, 2005, San Francisco. References
Ryan Russo’s paper on unbundled parking, explains shared parking schemes, provides
information on Palo Alto’s parking policy plans. The paper itself tackles a very complex
parking system for SRP.
[Permit Fees] building permit fees, zoning plan check, etc.
http://www.city.palo-alto.ca.us/padc/fees/FEE2001.pdf
[Preference Housing] http://www.cities21.org/workerHsng.htm Preference Housing for Office
Park In-fill within Stanford Research Park. Housing preference is a very hot topic in
planning. Many cities are asking for preferences, but the area is immature. Unlike the
draconian Pullman company towns of yesteryear, workforce housing within office parks
should improve employee quality of life while keeping employers out of the housing
development business. The Fair Housing Act permits thoughtful plans for "walk to work"
preference housing.
[TCAC] California tax credit allocation committee regulations implementing the federal and
state low income housing tax credit laws. February 26, 2002,
http://www.treasurer.ca.gov/ctcac/programreg/2002final.pdf
Thanks to Jim Galanis for review and comments.
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